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V E N T U R E C A P I T A L R E P O R T

Venture Capital Report U.S. | 3Q | 2018


VENTURE CAPITAL REPORT

The following report presents Dow Jones VentureSource’s quarterly findings for U.S. venture capital fundraising, investment, valuation,

and liquidity. The included charts and graphs offer a comprehensive view of the trends currently affecting the venture capital market.

Highlights for 3Q 2018 include:

•  U.S. venture capital fundraising decreased during 3Q 2018, both in terms of funds raised and number of closings, but the level of activity is still

considerable when compared with the same quarter last year.

•  Venture capital investment in U.S. companies hit an all-time record, eclipsing the dot-com bubble peak by 17%.

•  Both the number of IPOs and M&A deal values decreased compared to the previous quarter.

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VENTURE FUNDRAISING DECREASES IN U.S. DURING 3Q 2018

3

FUNDRAISING

U.S. VC Fundraising (2015–2018) Based on multiple closings

148 venture capital funds collected $12.81 billion in 3Q

2018, which represents a 27% decrease in the amount

raised from the prior quarter and a 9% drop in the number

of funds.

Insight Venture Partners X LP, a venture capital fund that

closed at $6.3 billion, was the largest of 3Q 2018, raising

$2.69 billion in its final closing, which accounted for 21% of

the total VC financing raised during the quarter.

3Q'15 4Q'15 1Q'16 2Q'16 3Q'16 4Q'16 1Q'17 2Q'17 3Q'17 4Q'17 1Q'18 2Q'18 3Q'18

Amount Raised ($B) $5.76 $9.15 $14.35 $11.91 $8.79 $9.58 $8.20 $14.38 $9.85 $5.65 $9.00 $17.61 $12.81

Number of Funds 78 104 131 119 117 149 174 160 120 142 148 162 148

0

40

80

120

160

200

$-

$4.00

$8.00

$12.00

$16.00

$20.00


LARGEST VC FUND CLOSINGS IN 3Q 2018

4

FUNDRAISING

Firm Name Fund Name Amount ($M) City State Offering Status Fund Type Fund Category Closing Type

Insight Venture Partners Insight Venture Partners X

LP $2,689.79 New York NY Closed Multi-stage

venture capital Venture Capital Final

Lightspeed Venture Partners Lightspeed Venture Partners Select III LP $1,050.00 Menlo Park CA Closed

Late-stage venture capital

Venture Capital Final

Foundry Group LLC Foundry Group Next 2018

LP $750.00 Boulder CO Closed Multi-stage


Lead Edge Capital Management LLC Lead Edge Capital IV LP $520.00 New York NY Closed

Multi-stage venture capital

Venture Capital Final

Ribbit Capital LP Ribbit Capital V LP $420.00 Palo Alto CA Closed Early-stage



U.S. EQUITY INVESTMENT HITS ALL-TIME RECORD

Investment in U.S. companies surged 14% in 3Q 2018 from

the previous quarter, hitting a new record for the second

consecutive quarter. Total funding now exceeds the peak

of the first dot-com bubble (1Q 2000) by 17%, although the

number of deals is 26% lower compared to that era. Deal

volume also fell on a quarter-over-quarter basis, dropping

8%. Median deal sizes actually decreased 14% from 2Q,

indicating that the jump in total funding was concentrated

in a handful of extremely large rounds. When compared to

last quarter, financing rose most noticeably in the

Business & Financial Services, Consumer Goods, and

Consumer Services sectors; IT and Healthcare fell slightly.

5

FINANCING

Equity Financings in U.S.- Based, VC-Backed Companies (2015–2018)

3Q'15 4Q'15 1Q'16 2Q'16 3Q'16 4Q'16 1Q'17 2Q'17 3Q'17 4Q'17 1Q'18 2Q'18 3Q'18

Amount Raised ($B) $23.18 $23.78 $16.33 $19.34 $19.62 $14.20 $19.49 $21.48 $23.59 $21.87 $26.87 $27.61 $31.53

Number of Deals 1308 1376 1289 1293 1349 1206 1396 1433 1376 1293 1476 1498 1377

0

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400

600

800

1000

1200

1400

1600

$0.00

$5.00

$10.00

$15.00

$20.00

$25.00

$30.00

$35.00


Number of Deals

EQUITY FINANCINGS IN U.S.-BASED, VC-BACKED COMPANIES, BY ROUND CLASS (QUARTER OVER QUARTER, 2015–2018)

6

FINANCING

3Q'15 4Q'15 1Q'16 2Q'16 3Q'16 4Q'16 1Q'17 2Q'17 3Q'17 4Q'17 1Q'18 2Q'18 3Q'18

Seed 108 133 117 89 120 107 145 165 150 147 147 181 155

First 384 385 348 361 366 333 337 342 274 266 315 361 282

Second 217 234 225 233 209 189 219 201 223 179 228 221 198

Later 429 432 422 415 453 379 442 402 419 406 473 438 424

Restart 3 2 4 4 3 1 6 1 4 0 2 0 4

0

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100

150

200

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450

500


Amount Raised ($B)

EQUITY FINANCINGS IN U.S.-BASED, VC-BACKED COMPANIES, BY ROUND CLASS (QUARTER OVER QUARTER, 2015–2018)

7

FINANCING

3Q'15 4Q'15 1Q'16 2Q'16 3Q'16 4Q'16 1Q'17 2Q'17 3Q'17 4Q'17 1Q'18 2Q'18 3Q'18

Seed $126.79 $177.54 $193.61 $154.44 $163.40 $202.78 $268.47 $417.22 $347.13 $396.55 $426.15 $525.26 $488.11

First $2,855.07

$3,054.11

$2,201.90

$2,367.45

$3,179.11 $2,168.84

$3,447.97

$3,234.87

$2,263.94

$3,521.95

$4,237.95

$3,686.23

$4,033.39

Second $3,213.75

$3,253.10

$2,233.95

$2,710.18

$2,445.16

$2,053.20

$4,102.88

$3,097.33

$3,676.54

$3,132.03

$4,868.66

$3,615.65

$5,288.29

Later $14,938.4

$16,174.8

$10,158.8

$9,575.36

$11,646.1 $7,772.16

$10,083.9

$12,670.2

$14,512.1 $12,788.2

$14,859.8

$16,959.3

$16,886.3

Restart $55.49 $16.20 $61.84 $41.80 $543.60 $11.00 $82.85 $11.00 $40.58 $0.00 $29.60 $0.00 $35.10

$0.00

$2,000.00

$4,000.00

$6,000.00

$8,000.00

$10,000.00

$12,000.00

$14,000.00

$16,000.00

$18,000.00


EQUITY FINANCINGS IN U.S.-BASED, VC-BACKED COMPANIES, MEDIAN DEAL SIZE (2015–2018)

8

FINANCING Median Equity Deal Size ($M)

3Q'15 4Q'15 1Q'16 2Q'16 3Q'16 4Q'16 1Q'17 2Q'17 3Q'17 4Q'17 1Q'18 2Q'18 3Q'18

Median Equity Deal Size ($M) $5.00 $5.00 $4.40 $4.21 $4.50 $4.70 $5.00 $5.22 $5.03 $5.76 $6.00 $7.00 $6.00

$0.00

$1.00

$2.00

$3.00

$4.00

$5.00

$6.00

$7.00

$8.00


EQUITY FINANCINGS IN U.S.-BASED, VC-BACKED COMPANIES, BY INDUSTRY GROUP (3Q 2018)

Business & Financial Services companies (which includes SaaS) received the

lion’s share of funding in 3Q, taking $7.55 billion across 299 deals. The amount

invested was up 21% over the previous four-quarter average, while the number of

deals fell 9%.

The IT sector dropped to second place, with $7.20 billion in 410 rounds. This

represented an increase of 25% in funding but a 5% dip in deal volume compared

to the previous four-quarter average.

Healthcare companies placed a strong third, securing $6.90 billion through 291

deals. These figures were up 7% and 3% in total funding and deal volume,

respectively, compared to the previous four-quarter average.

For the year to date, Healthcare is in the lead so far, with a total of $21.30 billion

raised across 870 transactions.

9

FINANCING 3Q 2018 Industry Breakdown By Number of Deals

3Q 2018 Industry Breakdown By Amount Raised ($B)

299

85

204

22 291

58

410

Business & Financial Services

Consumer Goods

Consumer Services

Energy & Utilities

Healthcare

Industrial Goods & Materials

Information Technology

24%

8%

19% 1%

22%

3%

23%

Business & Financial Services

Consumer Goods

Consumer Services

Energy & Utilities

Healthcare

Industrial Goods & Materials



TOP DEALS FOR VC-BACKED COMPANIES (3Q 2018)

1 0

FINANCING

Company Name Location Industry Code Industry Segment Industry Group Brief Description Close Date Round Type Raised ($M) Round Investors (* denotes lead)

Lucid Motors Inc. Newark,

CA Power Supplies

Electronics & Computer Hardware


Provider of energy and electric drive (EV)

solutions for electric vehicle applications.

9/17/2018 Other Equity 1000.00 Saudi Arabia Public Investment Fund

NewTV Los Angeles,

CA Broadcasting Media & Content

Consumer Services

Developer of series with short, Youtube-

length episodes. 8/7/2018 VC 1st 1000.00

Warner Media LLC, Walt Disney Co., Viacom, Sony, NBC Universal Inc., Metro-Goldwyn-Mayer Studios Inc., Madrone Capital Partners*, Lionsgate Entertainment, Liberty Global,

JPMorgan Chase & Co., ITV, Goldman Sachs Group Inc., Entertainment One Ltd., Alibaba Capital Partners, 21st Century

Fox Inc.

JUUL Labs Inc. San Francisco,

CA Sports/Leisure

Goods Personal Goods

Consumer Goods

Provider of electronic cigarettes.

7/10/2018 VC 2nd 650.00 Tiger Global Management LLC*

Peloton Interactive Inc.

New York, NY

Sports/Leisure Goods

Personal Goods Consumer

Goods

Provider of an interactive stationary

exercise bike. 8/2/2018 VC 6th 550.00

Tiger Global Management LLC, Technology Crossover Ventures*, GGV Capital

Ambatana Inc. New York,

NY Shopping

Facilitators Consumer

Information Services Consumer Services

Provider of a mobile application to buy and

sell used goods locally.

8/8/2018 VC 4th 500.00 Naspers Ventures*


TOP DEALS FOR VC-BACKED COMPANIES (3Q 2018)

1 1

FINANCING

Company Name Location Industry Code Industry Segment Industry Group Brief Description Close Date Round Type Raised ($M) Round Investors (* denotes lead)

Uber Technologies Inc.

San Francisco, CA

Transportation Services

Travel & Leisure Consumer Services

Provider of an on-demand ridesharing

and food delivery service.

8/27/2018 Corporate

Equity 500.00 Toyota Motor Corp.*

Zoox Inc. Foster City,

CA Automobiles Vehicles & Parts

Consumer Goods

Developer of self-driving cars.

7/17/2018 VC 2nd 500.00 Primavera Capital Group*, Mike Cannon-Brookes*, Lux Capital

Management LLC, Draper Fisher Jurvetson, Blackbird Ventures

Samumed LLC San Diego,

CA Biotechnology Therapeutics

Biopharmaceuticals Healthcare

Developer of therapeutics for

tissue-level regeneration.

8/6/2018 VC 2nd 438.00 Vickers Venture Partners, Starling Ventures LLC


MOST ACTIVE INVESTORS FOR U.S.-BASED, VC-BACKED COMPANIES (3Q 2018)

1 2

FINANCING

31

25

19 19

17 17

0

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10

15

20

25

30

35

Alumni Ventures Group Y Combinator GV New Enterprise Associates

Andreessen Horowitz Sequoia Capital


NUMBER OF DEALS/AMOUNT RAISED BY PRIMARY REGION (3Q 2018)

1 3

FINANCING Number of Deals in 3Q 2018 by Primary Region

Amount Raised ($B) in 3Q 2018 by Primary Region

Number of Deals by Primary Region 3Q 2018 296

35

102

77

120

438

55

59

77

111

Mid-Atlantic Midwest Central

Midwest East

Mountain

New England

Northern California

Pacific Northwest

South Central

South East

Southern California

Amount Raised ($B) by Primary Region 3Q 2018 $6.32

$0.45

$1.04

$1.07

$2.65

$14.28

$0.80

$0.57

$0.89

$3.38

Mid-Atlantic

Midwest Central

Midwest East

Mountain

New England

Northern California

Pacific Northwest

South Central

South East

Southern California

Mid-Atlantic

Midwest Central

Midwest East

Mountain

New England

Northern California

Pacific Northwest

South Central

South East

Southern California


NUMBER OF DEALS/AMOUNT RAISED BY METRO REGION (3Q 2018)

1 4

FINANCING

Number of Deals by Metro Region 3Q 2018

Amount Raised ($B) by Metro Region 3Q 2018

Austin 29 $0.29

Boston 109 $2.61

Chicago 33 $0.46 Dallas-Fort Worth 12 $0.07

Los Angeles 66 $2.14

New York 199 $5.36

Orange County 15 $0.25

Potomac 38 $0.61

San Diego 24 $0.89

San Francisco Bay Area 434 $14.21

Seattle 44 $0.68

Metro Region Breakout Number of Deals

Metro Region Breakout Amount Raised ($B)

12

15

24

29

33

38

44

66

109

199

434

Dallas-Fort Worth

Orange County

San Diego

Austin

Chicago

Potomac

Seattle

Los Angeles

Boston

New York

San Francisco Bay Area

Number of Deals by Metro Region

$0.07

$0.25

$0.29

$0.46

$0.61

$0.68

$0.89

$2.14

$2.61

$5.36

$14.21

Dallas-Fort Worth

Orange County

Austin

Chicago

Potomac

Seattle

San Diego

Los Angeles

Boston

New York

San Francisco Bay Area

Amount Raised ($B) by Metro Region


VENTURE M&A AND IPO MARKET ACTIVITY IN THE U.S. DURING 3Q 2018

In 3Q 2018, deal values for mergers and acquisitions of

VC-backed companies declined by 12% when

compared with the previous quarter.

During the same period, the number of IPOs declined

by 32% to a total of 21 listings for venture-backed

companies. While this represents a significant

decrease when compared with 2Q 2018’s record

quarter, it still comes in 163% higher than the number

of listings in 3Q 2017. Capital raised decreased by 53%

from 2Q, reaching $2.26 billion.

1 5

LIQUIDITY

Exit Opportunities for U.S. VC–Backed Companies (2015–2018)

0 50 100 150 200 250

3Q'15

4Q'15

1Q'16

2Q'16

3Q'16

4Q'16

1Q'17

2Q'17

3Q'17

4Q'17

1Q'18

2Q'18

3Q'18

3Q'15 4Q'15 1Q'16 2Q'16 3Q'16 4Q'16 1Q'17 2Q'17 3Q'17 4Q'17 1Q'18 2Q'18 3Q'18

IPOs 14 16 6 11 13 8 7 20 8 25 16 31 21

M&As 174 164 148 162 162 148 165 170 182 186 182 190 202


U.S. VC-BACKED M&As (2015-2018)

202 M&As of venture-backed companies in the U.S.

collected $33.02 billion during 3Q 2018.

•  Compared to 2Q 2018, when a total of 190

transactions accumulated $37.48 billion, the

number of deals increased by 6% while amount

raised decreased by 12%.

•  The largest deal of the quarter was

Cisco Systems’s acquisition of Duo Security Inc. for

$2.35 billion, announced on August 2. The deal

accounted for approx. 7% of the total amount paid

in 3Q 2018 for M&As.

1 6

LIQUIDITY

U.S. VC-Backed M&A Activity (2015 - 2018)

3Q'15 4Q'15 1Q'16 2Q'16 3Q'16 4Q'16 1Q'17 2Q'17 3Q'17 4Q'17 1Q'18 2Q'18 3Q'18

Amount Paid ($B) $27.37 $26.96 $23.10 $23.59 $26.40 $18.39 $20.22 $21.18 $21.80 $27.10 $32.00 $37.48 $33.02

Number of M&As 174 164 148 162 162 148 165 170 182 186 182 190 202

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TOP 3 U.S. M&As (3Q 2018)

1 7

LIQUIDITY

Company Name Location Brief Description Industry Code Industry Segment Industry Group Close Date Round Type Amount Paid ($M)

Acquirer

Duo Security Inc.* Ann Arbor, MI Provider of two-factor

authentication services.

Network / Systems Management

Software Software

Information Technology 8/2/2018 Acquisition $2,350.00

Cisco Systems (Nasdaq: CSCO)

Datorama Inc. New York, NY

Provider of a software-as-a-service (SaaS) based big data management

platform for advertisers.

Advertising / Marketing

Business Support Services

Business and Financial Services 7/16/2018 Acquisition $800.00

Salesforce.com (NYSE: CRM)

Mendix Inc.* Boston,

MA

Provider of platform-as-a-service (PaaS) back-

end integration services.

Business Applications Software Software

Information Technology 8/1/2018 Acquisition $730.00

Siemens AG (ETR: SIE)

*Deal pending regulatory approval


U.S. VC-BACKED IPOs (2015-2018)

21 venture-backed companies raised $2.26 billion through public

offerings in 3Q 2018.

•  Both the number of deals and the capital raised dropped

significantly from last quarter.

•  Tenable Holdings Inc.’s IPO was the biggest listing, raising

$250.70 million. The company, now quoted on the Nasdaq

Stock Exchange under the TENB ticker symbol, was valued at

$2.55 billion.

1 8

LIQUIDITY

U.S. VC-Backed IPO Activity (2015 - 2018)

3Q'15 4Q'15 1Q'16 2Q'16 3Q'16 4Q'16 1Q'17 2Q'17 3Q'17 4Q'17 1Q'18 2Q'18 3Q'18

Raised ($B) through IPO $1.63 $1.36 $0.38 $0.79 $0.99 $0.69 $3.95 $2.04 $0.62 $2.65 $1.75 $4.78 $2.26

Number of IPOs 14 16 6 11 13 8 7 20 8 25 16 31 21

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TOP 3 U.S. IPOs (3Q 2018)

1 9

LIQUIDITY

Company Name Location Brief Description Industry Code Industry Segment Industry Group Close Date

Round Type

Raised through IPO ($M) Exchange

Tenable Holdings Inc.

Columbia, MD

Provider of cyber security solutions.

Network / Systems Management

Software Software

Information Technology 7/26/2018 IPO $250.70

NASDAQ: TENB

Eventbrite Inc. San Francisco,

CA

Provider of online event management and ticketing

services. Shopping Facilitators

Consumer Information Services

Consumer Services 9/20/2018 IPO $230.00

NYSE: EB

Sonos Inc. Santa Barbara,

CA Provider of wireless speakers. Consumer Electronics

Electronics and Computer Hardware

Information Technology 8/2/2018 IPO $83.33

NASDAQ: SONO


ABOUT US

Dow Jones VentureSource helps venture capitalists, corporate development executives, investment bankers, and service providers find deal and

partnership opportunities, perform comprehensive due diligence, and examine trends in venture capital investment, fundraising, and liquidity. It

provides accurate, comprehensive data on venture-backed companies – including their investors and executives – in every region, industry, and stage of

development throughout the world.

The investment figures included in this release are based on aggregate findings of Dow Jones' proprietary research and are contained in VentureSource.

This data was collected through surveys of professional firms, interviews with company executives, and from secondary sources. These venture capital

statistics cover institutional equity investments in early stage, innovative companies and do not include companies receiving funding solely from

corporate, individual, and/or government investors. Figures contained throughout the report are current at the time of publication but are subject to

change without notice.

No statement herein is to be construed as a recommendation to buy or sell securities or to provide investment advice.

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